UPDATE 1-Loeb’s hedge fund Third Point to lose Rhode Island as client (Reuters)
Billionaire hedge fund investor Daniel Loeb will be losing Rhode Island as a client after the state’s pension fund found his Third Point LLC too risky for its taste and decided to pull out all of its money. The state’s Investment Commission, which directs how its $8 billion pension fund is invested, voted unanimously on Monday to redeem $74.3 million from Third Point, Joy Fox, a spokeswoman for Rhode Island Treasurer Gina Raimondo, said on Friday. The money will be returned on March 31.
After Scandal, SAC Capital Begins to Fade to Black (New York Times)
SAC Capital Advisors, synonymous with an insider trading scandal that has consumed the hedge fund industry, will soon cease to exist as Wall Street has known it. Steven A. Cohen’s 22-year-old hedge fund — once the envy of Wall Street — is completing plans to change its name and its corporate structure by mid-March, according to people briefed on the matter, a rebranding effort that comes after SAC pleaded guilty last year to criminal insider trading charges. In the spirit of the plea deal, which ordered SAC to shut its doors to outside investors, the new firm will condense into fewer legal entities and will not accept any external money.
Hedge fund veteran’s belief in gold unshaken (MINING.com)
Large fund managers like Paul Johnson and Eric Sprott long on gold suffered huge losses in 2013 as the price of the metal slumped 28%. Paul Singer, boss of 37-year old investment firm Elliott Management, also took a bath on the fund’s gold holdings last year, but it has not shaken legendary investors faith in the metal. USA Today report Singer in a letter to investors debunked the idea of Bitcoin as an alternative currency or storer of wealth adding that gold will be back in favour soon: “We think that gold is a unique investment asset, the only real money that has stood the test of time throughout recorded history,” Singer wrote…”
Some Quants Think They Know The Result Of The Super Bowl (Business Insider)
A quant asset management firm has developed a model to predict the winner of the Super Bowl. Los Angeles-based Analytic Investors believes that the Denver Broncos will beat the Seattle Seahawks in the Super Bowl XLVIII by more than three points. For the past several years, Analytic Investors has released its “NFL Alphas” analysis. The “NFL Alphas” model first began with portfolio manager Steve Sapra, who’s really in to sports economics. This year, the analysis was completed by portfolio analyst Matt Robinson, who focuses on Japanese equities at the firm.
Hedge funds seek 1.8 billion damages from members of Porsche’s owning family (Reuters)
Investors including U.S. hedge fund Elliott Associates have escalated a legal battle against members of Porsche’s supervisory board by seeking 1.8 billion euros ($2.43 billion) in damages from Wolfgang Porsche and his cousin Ferdinand Piech. The most recent lawsuit forms part of a legal campaign being waged by hedge funds in various courts across the world, seeking to recoup money which was lost by betting on a decline of Volkswagen’s share price in 2008. On Sunday, Porsche dismissed the most recent lawsuit, which was lodged at a Frankfurt regional court, as “unfounded”. Ferdinand Piech and Wolfgang Porsche were not immediately available for comment.
1997-type crisis looming? (CNBC)
ASX to open Singapore office in 2014 to attract hedge fund cash (The Malay Mail Online)
ASX Ltd. will hire staff for a new office in Singapore this year as Australia’s main exchange operator seeks to do more business with Asian hedge funds and proprietary traders. “It will be a meaningful presence,” Peter Hiom, Sydney- based deputy chief executive officer at ASX, said in an interview January 31, adding that the Singapore office will focus on derivatives products. “There’s an untapped opportunity for us in Southeast Asia.” The Australian bourse is expanding in derivatives, already its biggest source of revenue, as trading volumes for cash equities in its home market stagnate.
When corporate raiders come knocking (The Australian)
Daniel Loeb, 52, has a reputation for sending blistering critiques to companies he intends to overhaul, such as Sony Corporation (ADR) (NYSE:SNE) and Yahoo! Inc. (NASDAQ:YHOO). This time, he attacked the performance and management of Sothebys (NYSE:BID), calling the auction house “an Old Master painting in desperate need of restoration”. Sotheby’s has called Loeb’s campaign “baseless”, but as he amassed a 9.3 per cent stake in the company last year, the house has replaced several top executives, and has said it would release a capital allocation review that could offer more ideas to wring out value for shareholders. Last week, Sotheby’s announced it would pay a $US300 million ($342.4m) special dividend to shareholders and may sell its New York headquarters.
Hedge Fund Ads on the Way (On Wall Street)
Hedge fund manager Jonathan Hoenig wants you to know he’s not trying to be elitist. “There’s this perception that hedge funds are exclusive, but that perception is born from the regulations,” he says. Those regulations include limits around the investors the fund can accept and, until last September, a long-standing ban on hedge fund advertising and other forms of general solicitation. To prove the point, Hoenig stepped out with a print advertisement for his Chicago-based firm, Capitalistpig, even before a Jumpstart Our Business Startups Act provision made the practice legal.
Dalio Says Bridgewater Like An ‘Intellectual Navy SEALs’ (FINalternatives)
Bridgewater Associates founder Ray Dalio took his gospel of radical transparency to the mainstream this week, with an appearance on “CBS This Morning.” The hedge fund billionaire sought to explain his “principles” and their controversial application at Bridgewater. “What we do is we step back and we get to basically the fundamentals of how people think differently,” Dalio told Charlie Rose. “What people are good or bad at. What they’re like. We get at what they’re like. And then what to do about that. It’s like going into an intellectual Navy SEALs…”
Surge in shareholder activism straining investors’ resources (Pensions & Investments)
The proxy season has triggered a gold rush of activist institutional investors challenging companies. But this swell in corporate governance activity could strain investors’ resources, especially related to executive pay issues and shareholder engagements. Shareholders have been bolstered by recent investment returns in companies in which activists have been involved, said Patrick McGurn, special counsel, Institutional Shareholder Services Inc., Rockville, Md. ISS is a corporate governance and proxy-voting advisory firm. Activist hedge funds outperformed other hedge fund strategies in 2013, raising the attractiveness of the strategy for new funds and assets, Mr. McGurn said. But hedge fund returns generally lagged the Standard & Poor’s 500, he said.
